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SEND IN THE SUBS! YOUTUBE TO JOIN
THE AD-FREE FRAY

Subscription is definitely the buzzword of the moment. Google plans to launch an ad-free subscription version of YouTube, the Internet giant revealed in an e-mail obtained by Bloomberg. This is not Music Key, which launched in an invite-only preview last November; it's for the entirety of YouTube, pitting it against Netflix, Hulu and Apple’s new joint venture HBO Now. Revenue will be shared with content creators, the recipients of the email, and the service may launch by the end of the year, according to an inside source.

Google is alerting content creators because it wants them to agree to new terms that would let it include clips in the subscription tier. "We're increasingly moving into an age where consumers are learning to avoid advertising," reads a quote from BTIG analyst Rich Greenfield. "Between DVRs, Netflix and now Amazon, we're increasingly learning to lead an ad-free life."

YouTube is facing more competition for streaming videos. Netflix, which now has 57.4m subscribers, has vaulted to a big lead in marketshare, as the bar graph below illustrates. YouTube's share of streaming traffic during peak hours fell to 14% in North America in the second half of 2014, compared to 19% a year earlier, according to Sandvine data.

 

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